If the present worth of a sum is $600 and the true discount is $100, what is the

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Question: If the present worth of a sum is $600 and the true discount is $100, what is the amount after 2 years at 10% per annum?

Options:

Correct Answer: $900

Solution:

Amount = Present Worth + True Discount = 600 + 100 = $700. Amount after 2 years = 700 * (1 + 0.10)^2 = $800.

If the present worth of a sum is $600 and the true discount is $100, what is the amount after 2 years at 10% per annum?

If the present worth of a sum is $600 and the true discount is $100, what is the amount after 2 years at 10% per annum?

Present Worth – The current value of a sum of money, which is the amount that would need to be invested at a certain interest rate to grow to a future value.
True Discount – The difference between the future value and the present worth, representing the cost of borrowing or the interest that would have been earned.
Future Value Calculation – The process of determining the amount of money that an investment will grow to over a period of time at a given interest rate.